Capital gains tax calculator

Start with each gain: what you sold it for, less what it cost and the costs of buying and selling it. Add up the year’s gains, take off any losses made in the same year, then any losses carried forward from earlier years, then the £3,000 annual exempt amount. What’s left is the taxable gain. It’s added on top of your taxable income: the part that fits in what’s left of your basic rate band is taxed at the lower rate, the rest at the higher rate.

In the example, someone with £45,000 of income sells shares at a gain of £12,000. After the £12,570 personal allowance their taxable income is £32,430, which leaves £5,270 of the £37,700 basic rate band unused. The £3,000 exempt amount brings the gain down to £9,000: £5,270 of it is taxed at 18% and £3,730 at 24%, so the bill is £1,844.

How losses are used

Losses made in the same tax year come off your gains in full, even where that takes them below the exempt amount and wastes part of it. Losses brought forward from earlier years are different: only as much is used as brings the remaining gain down to the exempt amount, and the rest carries on to later years. An earlier year’s loss only counts once it has been reported to HMRC, within 4 years of the end of the tax year it was made in.

Assumptions

• You enter each gain already worked out. For shares and funds that means the cost under HMRC’s identification rules, described below, which the calculator doesn’t apply for you.
• Income is everything taxable this year before the personal allowance, savings and dividends included. The allowance is tapered above £100,000 on that figure, less any pension contributions and Gift Aid you enter.
• You’re UK resident for the whole year and the gains are your own, not a trust’s or a company’s.
• Business Asset Disposal Relief (18% on qualifying business gains), Investors’ Relief, carried interest, gains held over or rolled over, and main residence relief aren’t worked out. Enter a property gain after any main residence relief.

Gains don’t have a band of their own. They sit on top of your taxable income, and the basic rate band runs to £50,270 of income, which is £37,700 after the standard personal allowance. However much of that is left after your income is the slice of gain taxed at 18%; anything beyond it is taxed at 24%. So the same gain costs more in a year when your income is higher, and someone above the basic rate limit pays 24% on all of it.

Personal pension contributions paid under relief at source and Gift Aid donations extend the basic rate band by their gross amount, so they can move part of a gain from the higher rate to the lower one. Contributions taken from pay before tax, by net pay or salary sacrifice, already lower your income instead.

Scottish taxpayers use the same UK test. Their pay is taxed in the Scottish bands, but for capital gains what counts is how much of the UK basic rate band, up to £50,270, their taxable income leaves unused. The calculator asks where you pay income tax only to show this note; the figures are the same.

When you’ve bought the same share or fund at different times and prices, HMRC decides which purchase a sale came from, and so what it cost, in a fixed order:

1. Same day. Shares bought on the day of the sale are matched first.
2. The next 30 days. Then shares of the same class you buy in the 30 days after the sale, earliest first. This is the bed and breakfasting rule: selling at a gain or loss and buying straight back doesn’t set a new cost for the shares you kept.
3. The section 104 pool. Everything else sits in one pool per holding at its average cost. A sale from the pool takes the average cost of the shares sold, and the pool’s cost falls in proportion.

Cryptoassets follow the same same-day, 30-day and pooling rules. The calculator doesn’t apply them: work out each gain with the rules, or from your platform’s tax report, and enter the total.

Investments in a general investment account can’t be moved into an ISA as they are. They’re sold, and the cash used to buy them back inside the ISA, up to the £20,000 ISA allowance. The sale realises the gain built up so far, so it counts towards that year’s capital gains like any other sale. Once inside the ISA, later growth and income are free of tax.

As an illustration: a £50,000 holding with £10,000 of unrealised gain has 20% of its value as gain. Selling £15,000 of it realises a gain of £3,000, the whole allowance, so moving it all takes 4 tax years if nothing else changes. The calculator’s bed and ISA section works this out year by year from your figures, taking account of any allowance your other gains have already used. Real prices move, and a rise means less can be moved each year within the allowance.

The 30-day rule matches a sale with shares of the same class bought back by the same person in the same capacity. HMRC treats shares bought inside an ISA as held in a different capacity, so buying back inside the ISA doesn’t trigger the rule and the sale is calculated in the normal way. Buying back outside an ISA within 30 days does trigger it.

Dealing costs and any spread between the sale and repurchase price reduce what goes into the ISA, and the money is out of the market between the two trades unless both happen together. Some platforms offer a combined bed and ISA deal.